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Senate passes 5 percent tax on satellite TV to help schools

Updated: May 31, 2012 5:47PM

SPRINGFIELD — The Illinois Senate narrowly voted Thursday to impose a $75 million tax on satellite television providers in a move GOP critics described as “just another tax increase.”

The measure sponsored by Senate President John Cullerton (D-Chicago) passed 30-27 and now moves to the House. It required 30 votes to pass the Senate.

Pushed by the cable television industry, the proposal would levy a 5-percent “assessment” on satellite television provider revenues with the $75 million raised annually earmarked for public schools.

The issue surfaced after rank-and-file Senate Democrats complained about more than $200 million in education spending cuts in the upcoming budget that House Democrats devised.

Cullerton said the satellite television fee would achieve “parity” between the cable industry and satellite television providers, who aren’t taxed by local governments as cable companies are.

“It’s just another tax increase, OK?” said state Sen. Dale Righter (R-Charleston), who voted against the bill. “I’ll be interested in hearing whether or not anyone can tell us how much this will cost the average customer. Not the providers, they won’t pay it. They’ll pass it on to the same people who lost a week’s pay” when the state income tax was increased.

Cullerton disputed that the fee would trickle down to consumers.

“This is a very competitive market between satellite service and cable service, and I’d suspect in that competitive market, there’s not any guarantee any of these fees assessed would be passed onto the consumer.” 

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